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How do on-the-job injuries and illnesses impact wealth?

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  • Galizzi, Monica
  • Zagorsky, Jay L.

Abstract

This research focuses on one neglected area of workers' compensation research, the effect of injury and illness on net worth. We track participants in the NLSY79: one-third of these baby boomers were hurt at work, but 38% of them did not file for workers' compensation. We find that the typical young baby boomer who is never injured has both much higher absolute wealth and wealth growth rates than boomers who are ever injured. Regression results that control for unobserved heterogeneity suggest, however, that the injury does not predict lower wealth unless workers have reported wage losses or spells off work because of their accidents. For these employees wealth is dramatically reduced, regardless of their participation in the workers' compensation system. We also find that injured workers significantly reduce their consumption over time. These results raise new questions about the adequacy of workers' compensation benefits and the quality of jobs injured workers are able to return to. They suggest that sudden health problems caused by occupational injuries may affect more than employers' costs and individuals' incomes; they may have also wider and longer lasting consequences in term of families' wealth and well-being.

Suggested Citation

  • Galizzi, Monica & Zagorsky, Jay L., 2009. "How do on-the-job injuries and illnesses impact wealth?," Labour Economics, Elsevier, vol. 16(1), pages 26-36, January.
  • Handle: RePEc:eee:labeco:v:16:y:2009:i:1:p:26-36
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    References listed on IDEAS

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    1. Martin Browning & M. Dolores Collado, 2001. "The Response of Expenditures to Anticipated Income Changes: Panel Data Estimates," American Economic Review, American Economic Association, vol. 91(3), pages 681-692, June.
    2. Kennickell, Arthur B & Woodburn, R Louise, 1999. "Consistent Weight Design for the 1989, 1992 and 1995 SCFs, and the Distribution of Wealth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 193-215, June.
    3. Daniel S. Hamermesh, 1999. "Changing Inequality in Markets for Workplace Amenities," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1085-1123.
    4. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 537-579.
    5. William N. Evans & W. Kip Viscusi, 1993. "Income Effects and the Value of Health," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 497-518.
    6. Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-378, June.
    7. Leslie I. Boden & Monica Galizzi, 2003. "Income Losses of Women and Men Injured at Work," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    8. Campolieti, Michele, 2001. "Recurrence in Workers' Compensation Claims: Estimates from a Multiple Spell Hazard Model," Journal of Risk and Uncertainty, Springer, vol. 23(1), pages 75-94, July.
    9. Zagorsky, Jay L, 1999. "Young Baby Boomers' Wealth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 135-156, June.
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    Cited by:

    1. Caskey, Judson & Ozel, N. Bugra, 2017. "Earnings expectations and employee safety," Journal of Accounting and Economics, Elsevier, vol. 63(1), pages 121-141.
    2. repec:ctc:serie1:def15 is not listed on IDEAS
    3. Gabriele Mazzolini, 2014. "The economic consequences of accidents at work," DISCE - Working Papers del Dipartimento di Economia e Finanza def015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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